For my entire working life the conventional wisdom seems to have been that only a mug would pay their full share of taxes, and that it was every citizen’s duty to reduce their responsibilities in this area to a minimum. Those who succeeded in paying the least amount of taxes have generally been lauded as heroes.
More money is not the answer
We need to occupy our communities and demand less money, rather than occupying corporate spaces and demand more money.
More money for banks. More money for governments. More money for small businesses. More money for social services. More money for everything – who could disagree with that!?
Apparently the US and the UK are so short of money that their central bankers have had to print trillions more just to keep the wheel of society turning. Banks whose capital base consists of nothing more than bits of paper have apparently run out of the ability to write more bits of paper and now need others to print paper for them. Whole nations that voluntarily gave up the right to print their own pieces of paper are apparently on the brink of collapse without someone else lending them more bits of paper.
This situation is evidently insane. The problem is NOT too little money! The problem is TOO MUCH MONEY!
We talk of not being able to provide for our old age security without money… horse shit! You’ll only need money if no one else will help you. We talk of unemployment, when there is evidently so much basic work to be done around us building and maintaining and improving our communities. We have come to conceptualize ourselves as living in a world of individual separateness in which transactions can only occur when greased by the flow of printed pieces of paper. But this concept does not withstand even the merest scrutiny, in fact it requires deliberate denial all the time. We all know that we are people, living with others and largely dependent on each other to get through any single day. We are dependent on each others good graces, compassion, empathy and generosity – even for the most basic restraint of not running us down with their car in the carpark!
We have not run out of money, we have just run out the capacity for money to substitute for reality.
The frail reality of the theater set we have built to act out our life-play in is upon us. Soon it must surely become too obvious to ignore: neither we, nor our world, are built from money. We are flesh and bone progeny of the earth beneath our feet, and “our world” is but a social construct designed by us to support our huge number.
Money has a role, an important role, but it is just a role in the wider context of our society. Enterprise is a natural aspect of human society, and business is a good thing. But lack of money and lack of economic activity are not what ails us – there isn’t enough money in all the world to fix our social disconnectedness. Money cannot be used to pay for everything, it is an instrument for the exchange of surplus value and if we try to use it as a substitute for the value of life it loses its value, and its role collapses. This is the lesson of our times: we must learn to see the reality of our mutual interdependence and lose the illusion of separateness that our plunge into industrial capitalism pulled over our eyes.
We need to occupy our communities and demand less money, rather than occupying corporate spaces to demand more money. When we start giving ourselves the right to live in the reality we are already in we will not need to protest others to give us permission.
The Path to A Future: Economics 001
The economy, and implicitly the development of wealth, is a core issue that too often suffocates the debate about our options for change. Many of us come to the table with assumptions about the relationship between wealth and prosperity. We need to reevaluate these assumptions if we are to develop solutions to our problems. In this section we will revisit the basic constructs of economics and wealth creation, to make sure we are operating from a realistic and accurate foundation when we formulate the framework for our economies.
The typical policy debate today is about the balance between the social ills of the free market, and economic ills of a state-controlled economy. This suggests a built-in assumption that we must compromise our social security to let markets be free.
Why is that true? Why is it that market freedom is a function of social insecurity? What is it about economic theory that stipulates a need for the population to be prepared to pay a piece of their personal freedom, in order to get to a piece of the market freedom pie? The conventional answer to this is that the labor force needs an incentive to work, and that sometimes the appropriate incentive is survival. Apparently, without the threat of destitution, people will not take the jobs on offer in a free market!
Which leads to the next question: why would a free market create work that only those threatened with starvation would want to perform?
Oh I see, a free market doesn’t necessarily create undesirable jobs, it’s just that the free market rewards low cost, and low cost means work and reward conditions that only the potentially destitute would agree to work in.
This cyclical assumption that low cost requires undesirable work, which demands an insecure workforce, is fairly deeply embedded in our current cultural psychology, especially in the West. In fact it isn’t really challenged, because it is so widely held and so subtly integrated.
As I will show, the opposite is actually true. Secure populations, working voluntarily in jobs of their choosing, is the most productive economic model available. The “market” is not a policy model, it’s only a mechanism; it is no more an economic, or political, model than the explosion in a cylinder is a car.
Our desired outcome is prosperity. That is the destination everyone understands we are aiming for; everything else is just a means of achieving prosperity. The free market is not the destination, any more than collective bargaining is. So the first link to unhinge in our minds is that the “free market” is what we need. Keep your eyes on the prize: prosperity.
The “market” is a set of mechanisms that naturally directs resources to meet needs. While its principles are simple, in operation it accommodates a bewildering array of inputs, influences and outcomes. It’s like our brains: we know the principles on which they work, but that doesn’t mean we know how to work them.
Cost is a significant input to market mechanisms. When all else is equal, cost drives decisions to the most efficient outcome; that is the raison d’être of the market. But we should note that, almost always, cost is the last criteria in the decision tree; the item has to be fit for purpose first, and affordable second.
What about trade? Within a given market, does the locality need to be the lowest cost producer of the good or service? If trade is possible the answer is no, because if equal and lower cost items are available through trade, then trade will fill the need. Unless… unless the item is so vital to the survival of the population or the basic functioning of the society, that a breakdown of trade, for any reason, would be a strategic threat to everyone. There are certain items that are so strategically important that higher cost is not a barrier to local production, and the market must necessarily be modified in order to accommodate the higher priced, locally secured items.
This leads us to an important place on our journey and we would do well to stop and clearly annunciate our conclusions:
- The market is a great system for almost everything.
- The market is not an appropriate mechanism for the most important things.
Whoa! How did we get here? I’m a freemarket capitalist and I’ve been around for a while so I know a thing or two about the world I live in, and this doesn’t sound right at all! I’m going to have to go back and read those last few pages again. You’ve used some crazy commie logic to trap me into believing that the free market won’t solve these problems. Wait here while I reread.
Okay, back again. Well, um, I can’t see where I could disagree. It’s not like it’s complicated, right? There’s just some stuff in the world that’s too important to outsource. I can see that.
Now the other news: if there is no strategic imperative, there’s no reason to interfere in markets. This is where some get caught up in a different false linkage: they think that we can intervene in markets to make them produce social welfare and justice. In fact, the basic social welfare of our societies is not an output of markets. Markets do not have “well-being” as an output in any of their functional logic. Markets efficiently direct resources to fill the needs of consumers, that is all they do. The welfare of society and our quality of life have to be outputs of human endeavor, they are a function of choice. We do not have to choose the common good or a high quality of life, and we certainly won’t get either if we wait for markets to deliver them.
Let’s be fair to markets while we’re here: they don’t know how to benefit society, and it’s extremely unfair to ask them to do so. Markets, especially those catalyzed by modern banking systems, are good at creating wealth; but wealth is not the same as prosperity. Prosperity is a mixture of wealth, peace and freedom that delivers a high standard of life. So if we want prosperity, we have to mix the output of markets, with the output of our choices to promote peace and freedom.
When we can clearly see these distinctions, and the properly differentiated roles for economics and politics, we can formulate more coherent policies that are more likely to deliver our intended outcomes.
Economic policy should concern itself with:
- the maintenance of markets
- the management of the monetary system
- the administration of strategic resources
Political and social policy should focus on:
- the cessation of hostilities
- the protection of liberty
- the general welfare of society
Let’s look at each of these policy areas in turn, so that we may more clearly demarcate their boundaries. Once we have separated them in our minds, we will be better able to act in the right places to produce our desired results.
The maintenance of markets involves trying to ensure that they function as freely as possible by correcting naturally occurring defects as much as is possible. The two most common defects in market function are the imperfect distribution of information and the exclusion of external costs.
- Making as much information as possible available to consumers, with the lowest barriers to acquisition, is the best we can hope for; you can take a consumer to information, but you can’t make them know.
- External costs, “externalities” in official parlance, are those costs that can be directly attributed to the lifecycle of a product or service, but for which there is no one to demand payment during that lifecycle. Nature is a good example of a non-payment-demanding party to many transactions. When these externalities are recognized, the proper maintenance of market function requires that these costs are imposed on behalf of the non-paymentdemanders, usually in the form of some kind of tax, duty or other loading of the item’s cost profile.
The management of the monetary system is primarily about preserving the value of the currency. Given that there is no real basis of tangible value in a modern currency unit, it is important that the quantity of money in circulation be managed in line with the output of the economy. Furthermore it is essential that the banking system charged with the care of private deposits, debts and equity be regulated for stability. Modern economies based on monetary systems require a trusted banking function in order to operate, and so the maintenance of that system’s stability is paramount. (Banking is entirely different than investment management, which is not really a banking function at all, and should be kept separate from banking. In fact, the term ‘investment bank’ should be abolished.)
The third leg of economic policy is the administration of strategic resources. As discussed earlier, there are resources that are so important to the sustenance of a society that trade cannot be relied on for their procurement and distribution. These resources must be identified and their supply purposefully managed, such that their availability is as guaranteed as it is possible to achieve. Chief amongst these resources are shelter, food, healthcare, education, transport, energy, information and the legal infrastructure of democracy (the same services that form super-security). In most situations only a subset of the total market for each of these resources is strategic, and only that subset need be the subject of public policy. For example, the availability of clean drinking water is a matter for public policy but this does not need to extend to the bottled water market. Similarly the provisioning of primary health care as a public service, does not preclude the availability of specialized procedures in the private market.
Those are the elements of economic policy and maybe you’ve noticed certain absences that you might normally expect to be part of contemporary policy portfolios. Before going further, let’s do a quick review of the complementary political policies that accompany our economic policies, to shed some light on those absences.
We have said already that political policy should concern itself with the establishment of peace, the protection of freedom and the provision of welfare. As regards the economy, the establishment of peace and the rule of law are precursors to enterprise and trade. The freedom of the people is necessary for proper market function, the development of business and the fostering of innovation. Indeed, the freedom to choose and the freedom to fail are essential to the fluidity and effectiveness of market mechanisms.
The provision of public welfare is commonly understood to be the primary function of government, but the policy framework to deliver effective results has eluded most, if not all, to date. Public welfare policy has been colored by our history and has yet to free itself from the shackles of our legacy perspective. During the last century or so we have developed levels of efficiency and productivity that have created the capacity to provide universal welfare. The capability of the population to sustain itself, without reliance on the grandesse of a ruling elite or the magnanimity of magnates, means that we can truly deliver the bare necessities of life to all, at a reasonable cost to all.
The cost of universal shelter, sustenance, healthcare, education, transport, information and democratic freedom is about one third of the total output of modern economies. That’s right, for about 30 cents on the dollar we can afford basic housing, a healthy diet, primary health care, reasonable education, local public transport and universal digital information access for everyone. Not everyone is going to want or need every service, but if they did, we can afford to provide them today; with the same tax rates we are already paying.
So why aren’t we doing it? The primary reason goes back to the starting premise of this section: the idea that the provision of such welfare would fatally undermine the economy, the very system that produces the wealth that makes it all possible. And we’re back to the same logic we questioned at the start. Do we believe that the motivation to work, to innovate and to be more productive will disappear if we aren’t afraid of starving to death in the gutter? This is not reality. It misunderstands human nature, and the meaning of “welfare”.
Human nature is full of aspiration; that is what has driven our development over time. Once we have filled our bellies we desire taste; once we have rested we desire comfort; once we have seen color we desire lights and once we are satisfied we wish to contribute. The religions of the world are the ultimate examples of our capacity for aspiration, far beyond the mundane practicalities of life. Providing a roof, a bed and a bowl of soup does not satisfy the aspirations of anyone. Would it satisfy you? Wouldn’t you still want to see a movie, eat some chocolate or wear different clothes? Perhaps you’d rather own a mountain bike, become a photographer or grow some vegetables? To believe that providing the bare necessities of life to someone will blunt their motivation and dull their aspirations, is to negate what you know about yourself. It’s simply not a reality, not of anyone, anywhere.
So what should public “welfare” policy actually provide? The policy should aim to satisfy a basic, mutual social contract between neighbors: that no matter what fortune befalls you, you will have the bare necessities of life, and as much opportunity to make the most of your life as can be afforded. Viewed in this light, welfare policy is not a benefit that anyone is entitled to, it is a service delivered to the best of their neighbor’s ability.
Public welfare policy is really about delivering personal security and opportunity. As such it does not involve the transfer of payments, instead it delivers services that fulfill the social contract. Housing is made available to provide secure shelter, food sufficient to maintain health and medical services as can be afforded for all. Think of them as services, not dependent on the largess of some individual or group, but provided universally, as a birth right of citizenship. No cash, no luxuries and only what can be universally afforded from a reasonable tax.
Now start to imagine the impact of such a public welfare system on the economic system. No need for a minimum wage. Everyone has their basic sustenance taken care of, so they are free to provide or pay for labor at whatever rate they choose. On almost every level required for a flourishing market economy the situation is improved: workforce mobility, propensity for risk, innovation capacity, skills development, productivity, confidence and satisfaction. The implementation of universal personal security will have a dramatically beneficial impact on economic output, at the same time that it enables “low cost” production.
Because delivering universal services frees labor to be priced according to its marginal value added, the “cost” of labor throughout the economy is significantly reduced, especially at the lower skill levels. This in turn, has the knock on effect of reducing the nominal cost of delivering the universal services themselves, because a high proportion of the cost of delivering those services is labor related. In effect, providing universal services reduces the cost of delivering those same services.
A fundamental and progressive effect of universal personal security will be the stimulation and expansion of micro-enterprise. Freed from the pursuit of mere survival, the population will be able to use their more unique skills and interests to create micro-services and products that meet the needs of very small markets. This micro-economy has the ability to boost general satisfaction by allowing specific needs to be met more directly, at the same time that it further enhances the economy by dramatically increasing transaction volumes and efficiency. Child care that allows bicycle repair, that saves resources, that are diverted to power buses, that get people to work faster, that allows more family time. The feedback loops that reinforce the productivity, efficiency and diversity of the economy are endless. Additionally, as more needs are satisfied more directly by micro-suppliers, the dependence on mass production and long-distance transport is lessened, the resilience of local economies is strengthened and production becomes more environmentally sustainable.
When we can separate and distinguish between economic and political policy, we can make effective choices that will lead to the prosperity we desire. We don’t need an economic policy that creates jobs, we need a political policy that allows jobs to be created. We don’t need economic policies that encumber businesses with social responsibility; we need political policies that deliver real social security.
For our economy we need economic policies, and for our welfare we need political policies; each, unto their own. Far from economic growth resulting in social ills, or social growth resulting in economic ills; economic and social growth are mutually enhancing. Delivering universal social security will not erode productivity, it will enhance it. Unfettered markets will not drive social well-being into the ground, they will lift it up.
If we can just uncouple our unfounded assumptions about the relationship between enterprise and welfare for long enough to see again with clear eyes, based on what we know about ourselves, we can pave a Path to prosperity for all.
Part 17 in the serialization of the The Path to A Future.
A new section will be posted every 2 weeks during 2011. Enjoy!
To get a free PDF of the book go to www.standardsoflife.org/thepathtoafuture.
A Brief History of TEA
Total Economic Awareness (TEA) is used in this article to describe a philosophical framework, adopted by many people today, in which every activity is perceived as being of monetary value. It is not entirely new, King Midas had a touch of it, but it has never been so broadly adopted as it is now that it has become a defining feature of industrial capitalism. It is worth understanding a little about the evolution and development of TEA so that we can perceive it more accurately, and determine where it has infected otherwise functional systems.
TEA is essentially a completely commercial view of the world, encompassing both living things and inanimate objects. It is the “business” view of life, a mindset that sees everything as tradable and therefore worth something that can be traded for something else. In theory there is nothing wrong with this, and it is used in the theoretical study of economics; in practice, most traditions and religions warn against its adoption as a singular focus, or its use as an exclusive lens for life.
In the pre-capitalist world there were always some who adopted a TEA mindset, and they became the bankers and traders of their time and place. But their actions were always a minority of total activity, and they existing inside a wider context of other frameworks that had greater standing in their society, like religion and culture. It has only been in the last 50 years or so that TEA became such a widely adopted world view, and that is has become the definition of culture in certain societies; so much so that people refer to themselves as living is a “capitalist society” in which economics has come to define the culture they live in. This increase has been spurred in recent decades by the adoption of fiat currencies, which have allowed so many more people to avail themselves of greater wealth. The early industrialists and oil men at the turn of the previous century adopted TEA as a brazenly deliberate approach to life, developing grand plans for their businesses in which people were simply units of resource, borrowing the dislocated condescension of the aristocracy that preceded them. They set an example of grand achievement by developing huge industrial empires and amassing great fortunes without regard to the toll extracted from the ‘resources’ they used. The damage caused by their activities was obscured by dramatic advances in production and technology, and by their industrial contributions to war efforts.
In the middle of the 20th Century, as fiat currencies replaced gold standards, the example set by the early industrialists was adopted more and more broadly by the populations of the industrialized countries, encouraged by the innate desire for competitive advantage and the apparent absence of consequences. The early TEA adopters never had to acknowledge the real support provided by their societies, which constrained their excesses and caught the fallout that they ignored. So long as the purely commercial world remained a minority of all activity and was constrained to its own sphere, the TEA mindset of a minority could not destabilize the society.
But the untrammeled pursuit of advantage through wealth has a limit, and that limit is defined by the size of the consequences that it ignores (i.e. the extent to which it is exploitative). If 20% of the consequences are unaccounted for, then 80% is the maximum TEA penetration that a society can tolerate; if 50% of the consequences are ignored, then 50% is the maximum. But the theoretical maximum TEA penetration into a society has to be modified by the amount of social support that is present by default, without any commercial activity, and that is, at a minimum, 20%, rising to 50% as the prosperity of a society increases.
The formula for determining the maximum penetration that a society can tolerate is:
Population – Default Social Need – (TEA Penetration x Exploitation Factor)
Assuming that TEA activity has a 20% exploitation factor, then the maximum penetration is 65% is an underdeveloped society with a 20% default social need
100 – 20 – (TEA Penetration x 20%) = 80-20% = 65
and 40% in a developed society with a 50% default social need
100 – 50 – (TEA Penetration x 20%) = 50-20% = 40
The absence of fiat currency in pre-industrial economies meant that TEA penetration never reached much above 10% or 20% and could easily be tolerated, even if the exploitation factor was greater than 100%. If exploitation factors reached up into the 300%-1000% range (slavery) then those activities had to be exported to remote lands (colonies) so as not to destabilize the domestic society. The domestically sanitized presentation of the wealth acquired from TEA exploitation abroad gave it a legitimacy, and allowed the domestic audience to focus more on the benefits of the greater prosperity than on the costs of the fallout from the exploitation.
The introduction of fiat currencies effectively removed most of the barriers to broad adoption of TEA and so the only limit on its growth became the tolerance capacity of the society. The concurrence of increased access to wealth resulting from fiat capitalism and the growing dependent demography, caused by increased life expectancy and greater education requirements, created a collision course between the penetration of TEA and the maximum tolerable penetration rate for TEA. It became a race for individuals to adopt TEA (commonly known as the “growth of the middle class”) before the social tolerance level was reached, meaning the point at which there would be no more room on board that bus.
Constraining the exploitation factor allows TEA to penetrate society at closer to its maximum percentage, and in the beginning of broad TEA penetration this was an almost universally adopted convention – manifested in “a growing middle class with strong labour unions and safer workplaces”. But, as the maximum potential TEA penetration approached, it didn’t take a rocket scientist to figure out that even if exploitation was reduced to zero there still wasn’t room on the bus for much more than 50% of the total population of a modern society. So some people adopted the ultimate TEA rationale, which was to increase the exploitation factor by exploiting those running to get on the bus. If there wasn’t going to be enough wealth to give everyone comparative advantage, then you’d may as well stop playing by even the most basic social rules and adopt TEA as a total philosophy, in which those who didn’t grasp the finite nature of TEA should rightly be the victims of it themselves. This final and terminal stage of TEA is where we are today, in which a small minority of TEA adherents have callously figured out that their own advantage is best acquired through the maximization of exploitation. This maximization is achieved through the deliberate obscuring of the exploitation’s effects at the same time as the cynical promotion of TEA. Examples of this terminal TEA include denying climate science while promoting consumer credit to boost wasteful product consumption, and complete destruction of Appalachian communities to produce climate destroying coal.
An alternative to TEA is here.
Sleep-walking would be a particularly tragic way to go. After all that evolving, developing and civilizing, to just sleep walk into oblivion would hardly seem to do those millennia justice. The good news is that there some fairly sharp jabs to the collective ribcage happening, and there seems to be some awakening.
America makes for a good example because its big, and when a giant is sleepwalking, you can see the others in room scurrying to get out of the way. Mr Obama is a nice enough guy, and that guy Ryan looks decent, but they are both selling a load of twoddle. A 10% cut or a 20% cut? Either way the giant’s pants will fall down, and he’ll trip. Last week Obama warned the good people of the USA that in 14 years from now (2025) the amount of taxes paid would only be enough to cover pensions and medical costs for the poor and the elderly. Wow! Except that: the taxes paid today (2010) are only enough to cover pensions, medical costs for the poor and the elderly, interest on the debt and the other mandatory programs – the entire military and discretionary budgets of the US are uncovered! No education, no transport, no infrastructure, no defense! See for yourself.
This economic model doesn’t work, it simply cannot add up; no matter how many cuts are made or how many taxes are raised. Total Economic Awareness (TEA) is bust – not everything can be priced in dollars and paid in dollars. The TEA Party are the only honest ones about this: their solution is to disband society, every dog for itself, and devil take the hindmost. That’s the only economic model in which TEA works, and it’s not a world I want to live in, do you?
“Can’t we just go back to where we were a few decades ago?” (Old liberals ask some version of this simple question, born of a lifetime fatigue of fighting the good fight and a nostalgia for less urgent times.) No, we can’t. We can’t because we no longer live on borrowed infrastructure, with swollen productive demographics, and easy exploitation of a ‘third world’. Sorry, those times have expired and now we have to deal properly with billions of people, a finite planet and honest respect for everyone’s rights.
We didn’t pay for what we’ve got.
We’re not paying for what we’re using.
We haven’t saved for what we need.
This not a budget balancing problem, this is a philosophical realignment problem.
If we don’t want to live in a TEA-dog-devil world, what’s the alternative? The only real option is a universal-social-love world. It so happens that that is also the cheapest, most sustainable and funnest world to live in!
Let’s get some clarity about the world we do actually live in, so we can be clear about why TEA economics doesn’t and won’t work. We live in relative peace, with fairly good healthcare and decent nutrition: that means that our society has a “balanced demography”, in which less than half the population is out of school, able bodied and under retirement age. We live on a warming planet, on which the next 50 years of climate instability are already locked in by our actions during the last 100 years: a healthy, sustainable society has to have the kind of infrastructure that we will have to work really hard for several decades to build. In a multi-polar, mutually-respecting world, a prosperous economy cannot be dependent on the exploitation of other people, stored energy or the waste of resources: that is going to require a really fundamental reorganization of our society and its economy. We need to be able to rebuild our global infrastructure for sustainability while we support a majority of our contemporaries, without exploiting each other or the planet.
Is it starting to get clearer now? Are we going to get to where we need to go, in the time we have available, with spending cuts and tax rises? No, tinkering with the percentages simply won’t do it. Universal Social Awareness (USA) is the route to understanding how we can rearrange our social and economic structures to achieve what must be done in the coming decade or so. As we wake up we will start to see that our mutual promise of social support is not properly represented in a cheque, and when it is delivered in kind instead it liberates our economy, empowers our democracy, and liberates our nature.
Go to the wiki and read about how simple changes to the way we deliver social security, organize our democracy, and pay for it all, provide a path to a future we want to live in.
Peace, love and awakening.
Social Security is Serious Stuff
If you think that social security is the generous expression of care for others in a civilized society, think again.
This may come as a surprise to many Americans, even a few Europeans: a functional social security system is a vital underpinning for a capitalist economy. Without functioning social security, there is insufficient society to support a vibrant economy; social security systems actually catalyze economic activity, and the prosperity it generates.
There are other vital reasons for maintaining a functioning social security system (a basic social “safety net”): maintaining social peace, elevating confidence, satisfying our natural empathy and improving sustainability. But even without those reasons, our economy simply cannot prosper without social security. It’s serious business – social security is really important. It isn’t a policy “option”, social security is the imperative at the root of all the things we cherish about our peaceful and prosperous life.
In the face of massive debts and monetary instability, our “Total Economic Awareness” (TEA) delusion jumps up and we make the kind of mistake that everyone makes in a panic: we grasp for simplistic, obvious solutions. No money left: OK, stop spending it. That’s the kind of reaction you get to apologize for later, in your personal life (so long as you didn’t destroy something or do something unforgivable) but when you’re a sophisticated, modern society, that kind of reaction just won’t do. We didn’t come this far, or get to this point, without a lot of careful attention and wisdom gained from many experiences – we need to remember that, and cultivate the poise that allows us to make sensible decisions about serious matters at important moments.
The current fashion for degrading the social security of our societies, as a means of supporting huge debt burdens, is extremely dangerous and very short sighted. And this is happening just as we enter the times when climate instability is likely to test us all.
The reasons why social security is an absolutely essential foundation of our society include:
- Our social cohesion is fundamentally dependent on the maintenance of basic life services for everyone
- The health of our economy is dependent on broad economic participation, both as producers and as consumers
- Innovation requires risk taking, and social security encourages risk taking
- Situations and circumstances change: our societies and their economies need to transition as smoothly and quickly as possible
- The rule of law and the control of crime are dependent on broad participation by all
- The quality of our democracy is dependent on an educated, informed and involved citizenry
- Our ability to withstand shocks and natural disasters is heavily dependent on our social cohesion
Social security is not an optional, luxury expression of generosity, that we can afford to do away with when money is short. Social security provision is an absolutely essential, basic building block of a peaceful, prosperous and sustainable society – without it, peace, prosperity and our survival are all endangered.
How do we square that essential nature of social security, with the budget dilemmas and economic weakness of these times? To resolve this conundrum we must revisit what it is that makes up the essential nature of “social security”: it is the provision of personal security from the elements, hunger, sickness and depravation to each and every member of our society. This is not a monetary transaction, it is a social intention. We will not make our way out of this until we fully grasp the proper nature of social security.
In the Standards of LIFE we have modeled the impact of delivering social security as a set of universal services, and found that this not only fulfills the essential nature of social security, but has positive knock-on effects across the economy and budgetary process that address the concerns of fiscal responsibility and fosters sustainable prosperity. We must solve our budget problems, resolve the monetary dilemma and build sustainable societies, all at the same time – and the only way to do that is with the parallel adoption of universal services and micro-economics.
Read more and find out how to fix our problems without breaking our societies at www.standardsoflife.org.
Decision Density – Corruption Catalyst
The relationship between decision density and corruption provides the clue to reducing both.
Corruption is the pernicious rot that bedevils even the most “civilized” of our modern societies. At its worst it deprives millions of even the most basic dignity, but it always perverts the course of democratic will, our intentions, the peoples’ good. Far from being a compulsory attribute of life, corruption is the outcome of human tendencies that we can, indeed we must, intentionally construct our societies to minimize. After all, corruption is just another form of crime, and we do plenty to deter other criminal behaviour.
Corruption is the misappropriation of other peoples’ money, the perversion of standard processes and the manipulation of good intentions. Like all crime, it is dependent on two primary factors: the opportunity and the motive. Given that the motive is part of an internal process in the individuals who commit the crime (that’s the bit used to excuse it), structural solutions must focus on the opportunity (that’s the bit we can do something about). The opportunity for corruption stems from the confluence of two conditions:
- the abstraction of the decision point from those affected,
- a lack of oversight and transparency.
When decisions get condensed into a small group (such as Gaddafi’s family in Tripoli, the policy elite in Washington DC, the super-bankers in the City of London or NY) they become subject only to the oversight of others within that group. It is inevitable, even desirable, that some decisions affecting millions are taken centrally, but we should be cautious about any centralization of decision making on the understanding that this propensity for undersight exists. Oversight takes time and resources, and when decisions are clustered in a small group the likelihood that decision density will exceed oversight capacity is greatly increased.
A decision taken at a substantial distance from those affected is less likely to be questioned effectively. Even if the interested parties have the resources to review the decision, they cannot access the remote decision makers. And visa versa, if the decision maker is not subject to the effects of their decision, they inevitably care less about the impact.
Spreading decision making out to the lowest effective layer is the key to improving decision quality and reducing corruption. The absence of an integrated framework of distributed democratic power, that allows for the placement of decision making at the most effective level, is the most glaring hole in our current constructs for democracy; and we must remedy that if we are to make the progress we need to make on so many fronts. Those who are starting now to implement democratic systems for their societies should pay close attention to the critical importance of formally integrating distributed democracy, because just democratically electing a national president is likely to do very little to improve their condition.
Multi-layered representation is an important development for 21st century democracy, and it’s time we started to incorporate it into our thinking and our demands for our futures.
The Path to a Future: Security
Part 5 in the serialization of the The Path to A Future. Real security.
A new section will be posted every 2 weeks during 2011. Enjoy!
If you want to get a free PDF of the book go to http://www.standardsoflife.org/thepathtoafuture.
To reach our destination we need the full participation and maximum contribution of every person. When we talk about security on The Path to a Future, what we mean is the personal, material security of each person. Our personal participation requires that we are not wondering where our next meal will come from, or if we will have a roof over our heads when we get too old to build a house. If people are insecure about their own futures, they will not lift their sights enough to act in the best interests of everyone and the planet.
Population control, mutual cooperation and environmental management are all dependant on the personal security of each and every person in the world. The cessation of violence and focused attention on transitioning to sustainable economies are also dependent on the personal security of people everywhere. So personal security is a vital component of our Path.
To provide this security, every society will need to provide every member with the bare necessitates of life as a right of citizenship. Everybody needs to be freed from basic need; this is not the same as free from want.
We’re not talking about 20th Century social security benefits here; we’re talking about a 21st Century personal security underpinning for the whole society, what we will call “super-security”.
No cash, just services.
The security we need must come from a mutual guarantee to each other that, no matter what fortune befalls us, we will each ensure that the other has the bare necessities for life, and the opportunity to make what we can of our circumstances. Of course, the extent, breath and quality of the services will depend on the capacity of the particular constituency we live in.
At the most basic level, shelter and sustenance must be guaranteed globally, to all, at every age. Fully implemented, personal security services include healthcare, education, transport and information. These services need to be provided free of payment, at the point of need and universally to every citizen and resident of the constituency, without means testing.
This concept of personal security is, at once, so simple and so shocking. We tell ourselves that of course we wouldn’t step over the bodies of those less fortunate than us as we walk down the street; but we also tell ourselves that we cannot possibly provide everyone with free food and shelter. We think we can’t afford it, and that it would cause our whole system of commerce and labor to disintegrate.
The reality is that we can afford to do it, it’s not expensive and it creates the platform on which to build the most productive society that human history has ever known!
A same basic rate of income taxes we pay today of between 25% and 30% will fund these services, in full, in the average industrialized society. The mechanism that makes providing personal security affordable is linking the costs of the services directly to the tax system; such that an average earner is paying sufficient taxes to pay for the services they receive. Many of us in those societies already pay those rates of taxation (federal, state, local, social security and health insurance), without receiving the benefits of the personal security that could be provided!
Guaranteed basic personal security does not destroy incentives. We all know for ourselves that as soon as our most basic needs are met, our next level of desires arises, and those are every bit as strong an incentive to all of us. The difference is that in the pursuit of our higher needs we make our more valuable and unique contributions, greatly enriching the fabric of our societies, far beyond the desultory contributions we make for mere survival.
As we move forward to describe other aspects of The Path, just keep in mind that we need the maximum contribution and the full participation of everyone, if we’re going to make it to our destination. The personal “super-security” of everyone is the key to unlocking the energy and focus we need to build The Path.
Option 2 : Everyone is right
We need to cut our debts down to size. We need to invest in our infrastructure. Taxes reduce incentives, and need to be held to a minimum. Without education and research we cannot build a peaceful and prosperous society. The political system is unresponsive and corrupt, and needs fundamental reform. The financial industry is overweight, and needs to be regulated. Without enterprise we cannot afford our lifestyles, so we must support and encourage businesses. There are bad people in the world, and we need to defend against them. There is oppression in the world, and we need to support the rights of the oppressed. We must balance our budgets. We need alternative energy sources. We are too selfish, ignorant and introverted. We are empathic, loving creatures who all share common ancestors and a common planet.
All of that is true.
And there are the truths we dare not speak aloud because no one has their answers:
- Capitalist economics is fundamentally dependent on a social safety net for its survival.
- Humans have never before inhabited this planet with today’s atmospheric configuration.
- Human-scale is not an option, for humans it is the only option.
In the face of all these seemingly conflicting truths many of us are dazed and confused. How do you lower taxes and spend on infrastructure? How do you regulate banking and enable commercial enterprise? How do you survive in a world of differences without a massive army? How do we get from the mess we’re in, to sustainable prosperity? Confused?
Confusion is only a very short term option. When you are walking in tall grass and you hear a rustle, you have a moment to decide whether you will change direction or speed; after a short time you have made your decision, even if you have not acted. Confusion is not a valid state, it does not appear anywhere in Nature except in the human mind. Confusion is the nexus of choice and contemplation, and it exists within the unyielding contexts of time and consequence. It is the curse on the flip-side of the luxury of choice. We cannot remain confused in our thinking and about our options for long.
It’s time to stop taking sides and start deciding.
The choices we face are simple:
- Option 0 : There’s nothing wrong and nothing needs to change (Ignorance)
- Option 1 : Things need to change, and I don’t know what to do, but I am ready to support someone else changing them (Confusion)
- Option 2 : Things need to change and I am changing them now (Action)
Which option are you taking?
In order to take “Option 2” you have to move past describing all the things you know to be true, and decide what to do about them. Everything in the first paragraph of this article is true, there is no sense in splitting one set of truths from another. Identifying with one set of truths might provide you with identity, but it does not move us closer to resolution.
It’s time to start talking seriously about what we’re going to do differently, about what we are actually going to implement in the next few years. We need to engage with solutions: real, practical changes we are going to make in our social, political economic structures now that will actually lead to a sustainable existence.
That’s what we are doing at Standards of LIFE – and we need you to join in. Take Option 2!
Infrastructure has never been commercial
Great civilizations require great infrastructure, and great infrastructure has never been a commercial endeavour. It’s time to face reality and get on with the job.
The great societies, those that have spawned the great advances in learning and development, have been built on great infrastructures. Those infrastructures have never been built by commercial enterprises operating in competitive markets. Great infrastructures (like the Egyptian, Chinese, Roman, Indian, Euro-colonial and American) have been built with public funds subsidized by socialized labour.
The greater Los Angeles area has over 20 million people, with less than 20 days’ food supply – if it were not for the roads and other infrastructure, built with public funds and socialized labour during the Great Depression of the 1930s, the entire LA basin could not survive for long: no food, no water, no power. There would be nowhere in the world to land a jumbo jet, if it were not for publicly funded infrastructure.
Now the world needs to move to a new energy infrastructure that complies with our planet’s laws of thermo-dynamics. This infrastructure, where it does get built in time, will get built by the societies that leverage public funds and socialized labour.
What is “socialized labour”? Socialized labour is labour that is provided at below market rates of monetary compensation, and it is available in three varieties:
- forced – involuntary labour coerced by violence and manipulation, such as slavery and prison labour
- reluctant – marginally motivated by meagre rewards and the threat of ostrification
- cooperative – willing labour provided as part of a mutually recognized common purpose from which all will benefit
Which one of those models for socialized labour is likely to yield the effort required to build our new infrastructure?
Some version of forced labour was the choice of ancient civilizations, and some version of reluctant labour is the option provided by today’s social and economic structures. What we will need is a cooperative effort, and that will require social and economic structures akin to those proposed in the Standards of LIFE.
Our current preference for giving public money to commercial organizations, that operate using market-priced labour, will NOT deliver the infrastructure we need at a price we can afford. There isn’t enough money in the world to pay for the infrastructure we need – this is a fact that would be much more obvious to those of us sitting on infrastructure built by our forebears, if we weren’t. Think about it: we’re broke and we haven’t even invested in maintaining the infrastructure we inherited. This is serious and immediate, we must act now.
Option 0: do nothing
Option 1: fantasize about a different future
Option 2: implement Universal Services and start building our 21st C infrastructure
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